Bank of Israel maintains benchmark interest rate at 1¾% for April, May

By Tali David

Minneapolis, March 25 - The Bank of Israel decided to keep its benchmark interest rate at 1¾% for April and May, according to a bank notice.

The Consumer Price Index remained unchanged for February, in line with forecasts, the notice stated.

The rate of inflation over the last 12 months was essentially unchanged, at 1.5%.

Forecasters' inflation projections for the next 12 months, as well as inflation expectations based on over-the-counter CPI futures contracts offered by banks, were 1.8% on average, similar to last month.

According to the statement, inflation expectations for the next 12 months calculated from the capital markets, seasonally adjusted, remained stable at 2%. Inflation expectations for two years and longer in the short term remained at 2.4%, while they declined slightly to 2.3% for longer terms.

The decision to keep the interest rate for April and May at 1¾% is consistent with the Bank of Israel's interest rate policy which is intended to entrench the inflation rate within the price stability target of 1% to 3% a year over the next 12 months and to support growth while maintaining financial stability.

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